Bitwise Crypto ETFs: A Bold Leap with 11 New Funds Including AAVE and UNI

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Bitwise Crypto ETFs: A Bold Leap with 11 New Funds Including AAVE and UNI

In a significant move for digital asset accessibility, Bitwise Asset Management has formally requested regulatory approval to launch 11 new cryptocurrency exchange-traded funds (ETFs). This filing, submitted to the U.S. Securities and Exchange Commission (SEC) in March 2025, targets a diverse basket of assets including AAVE, UNI, and ZEC. Consequently, this proposal marks a pivotal expansion beyond the established Bitcoin and Ethereum ETF products. The application details a novel 60% direct spot investment strategy, potentially reshaping how traditional investors gain exposure to the crypto ecosystem.

Bitwise Crypto ETFs: Deconstructing the 11-Fund Proposal

Bitwise’s latest filing seeks to list ETFs for 11 distinct cryptocurrencies. The list prominently features governance tokens from leading decentralized finance (DeFi) protocols, such as Aave (AAVE) and Uniswap (UNI). Furthermore, it includes privacy-focused assets like Zcash (ZEC), newer layer-1 blockchain tokens including NEAR, SUI, and TRON’s TRX, and other specialized digital assets like Ethena’s ENA and Bittensor’s TAO. Each proposed fund would operate under a consistent structural framework. According to the filing, a minimum of 60% of each fund’s assets would be held directly in the underlying spot cryptocurrency. The remaining portion would be allocated to other exchange-traded products (ETPs) that track the same asset. Additionally, the funds reserve the right to use futures contracts and other derivatives for precise exposure management. This hybrid model aims to combine the direct ownership benefits of a spot ETF with the flexibility of derivative instruments.

The Strategic Composition and Target Assets

The selection of assets reveals a calculated strategy by Bitwise. The inclusion of AAVE and UNI directly targets the growing institutional interest in decentralized finance. These tokens govern two of the largest DeFi protocols by total value locked. Meanwhile, assets like NEAR and SUI represent investments in competing smart contract platforms aiming to scale blockchain technology. The filing also covers a wide range of crypto sectors, from artificial intelligence (Bittensor’s TAO) to real-world asset tokenization. This diversified approach suggests Bitwise is betting on multiple narratives within the broader digital asset space rather than a single trend. The 60/40 spot-to-ETP ratio is a critical detail, designed to provide robust underlying asset backing while maintaining operational liquidity.

SEC Implications and the Evolving Regulatory Landscape

This filing arrives during a period of intense scrutiny and gradual acceptance from U.S. regulators. The SEC’s approval of spot Bitcoin ETFs in January 2024 established a crucial precedent. However, approving ETFs for a broader set of altcoins presents new regulatory challenges. The central question remains the legal classification of each asset. The SEC has previously suggested that many cryptocurrencies, beyond Bitcoin, could be considered securities. Bitwise’s filing, therefore, acts as a direct test case. It challenges the SEC to apply its regulatory framework to a suite of complex digital assets. Approval would signal a major shift, effectively granting a regulatory stamp to a wider crypto market segment. Conversely, rejection or delay would reaffirm the current cautious stance and likely focus future ETF applications only on the largest assets like Ethereum.

Expert Analysis on Approval Prospects and Timeline

Financial legal experts point to a potentially lengthy review process. “The SEC will meticulously examine the liquidity, custody solutions, and market manipulation safeguards for each of these 11 assets,” notes a former SEC enforcement attorney specializing in digital assets. The process involves public commentary periods and potential revisions, often taking several months to over a year. Analysts from Bloomberg Intelligence have previously modeled approval probabilities for Ethereum ETFs, but models for this broader basket are less established. The outcome may hinge on ongoing litigation and legislative developments, such as the FIT for the 21st Century Act, which seeks to clarify crypto market regulation. Bitwise’s established track record as a registered investment adviser and its existing suite of crypto index products may bolster its application’s credibility with regulators.

Potential Market Impact and Investor Accessibility

The launch of these ETFs would dramatically lower the barrier to entry for a vast pool of investors. Currently, direct investment in assets like AAVE or ZEC requires navigating cryptocurrency exchanges, managing private keys, and understanding wallet technology. An ETF, traded on traditional exchanges like NYSE Arca, simplifies this process entirely. Investors could buy and sell shares through their existing brokerage accounts. This accessibility could funnel significant new capital into the crypto markets. Moreover, the structure provides a regulated, audited, and custodially secure vehicle—a key concern for institutional allocators like pension funds and endowments. The 60% direct spot holding is particularly significant. It ensures a substantial portion of the fund’s capital directly purchases and holds the native tokens, creating consistent buy-side pressure on the underlying markets.

Comparative Analysis with Existing Crypto ETPs

The table highlights Bitwise’s hybrid model. It differs from futures-based ETFs, which carry roll cost risks, and from grantor trusts, which often trade at significant premiums or discounts to net asset value. While similar spot products exist in Europe, a U.S.-listed ETF would tap into the world’s largest capital market.

Conclusion

Bitwise’s filing for 11 new crypto ETFs represents a bold strategic push into the next frontier of digital asset investment products. By targeting assets like AAVE and UNI with a 60% spot-backed model, the firm is testing the boundaries of current SEC policy. The proposal’s success hinges on regulatory interpretation, market infrastructure, and demonstrated investor protection mechanisms. If approved, these Bitwise crypto ETFs would unlock unprecedented mainstream access to a diversified portfolio of cryptocurrency innovations, potentially catalyzing the next wave of institutional adoption. The market now awaits the SEC’s response, which will set a definitive course for the integration of altcoins into the regulated financial mainstream.

FAQs

Q1: What cryptocurrencies are included in Bitwise’s new ETF filing?
Bitwise’s filing proposes ETFs for 11 assets: AAVE, UNI, ZEC, CC, ENA, HYPE, NEAR, STRK, SUI, TAO, and TRX. This list includes DeFi governance tokens, layer-1 blockchain tokens, and other specialized digital assets.

Q2: How would these proposed ETFs be structured?
Each ETF would invest at least 60% of its assets directly in the spot (actual) cryptocurrency. The remaining portion (up to 40%) would be allocated to other exchange-traded products that hold the same asset. The funds may also use derivatives like futures for exposure management.

Q3: Why is the 60% direct spot investment important?
This structure ensures a majority of the fund’s capital directly purchases and holds the underlying tokens. This creates tangible buy-side demand in the crypto markets and provides shareholders with more direct economic exposure compared to a fund holding only futures contracts.

Q4: What is the main regulatory hurdle for these ETFs?
The primary hurdle is the U.S. Securities and Exchange Commission’s (SEC) view on whether these specific cryptocurrencies are classified as securities or commodities. The SEC has been hesitant to approve spot ETFs for assets it considers securities, which has been a point of contention for many altcoins.

Q5: When could these Bitwise crypto ETFs potentially launch?
There is no guaranteed timeline. The SEC review process for novel products is often lengthy, involving multiple rounds of comments and revisions. Based on prior ETF approvals, the process could take anywhere from several months to over a year, assuming the application is ultimately approved.

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